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Wall Street ends weaker after stimulus hopes come back down to earth

Downbeat comments from Treasury Secretary Steven Mnuchin that a deal would not likely be made before the vote

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Reuters 

Wall street
US stocks had rallied in recent sessions on optimism that the government would provide a fresh stimulus to reduce damage caused by the coronavirus pandemic

finished weaker on Wednesday, led lower by and Microsoft, as investors lost hope that a US fiscal stimulus would be approved before the presidential election in November.

Downbeat comments from Treasury Secretary Steven Mnuchin that a deal would not likely be made before the vote added to fragile sentiment following a mixed bag of quarterly earnings reports from major lenders.

"At this point getting something done before the election and executing on that would be difficult, just given where we are and the level of detail, but we're going to try to continue to work through these issues," Mnuchin said at a conference sponsored by the Milken Institute.

had rallied in recent sessions on optimism that the government would provide a fresh stimulus to reduce damage caused by the coronavirus pandemic.

Optimism took hold like a rocket last week and now it's coming back down to earth a little bit, said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York. "I think a stimulus as a large macro event is already baked into stock prices. It's just a question of when the details emerge and when the stimulus goes into effect." dropped 2.3 per cent and lost 0.9 per cent, both weighing more than any other stocks on the

The Industrial Average fell 0.58 per cent to end at 28,514 points, while the lost 0.66 per cent to 3,488.67.

The Nasdaq Composite dropped 0.8 per cent to 11,768.73.Bank of America fell 5.3 per cent and Wells Fargo tumbled 6 per cent after a disappointing quarterly results.

That left the banks index 2.4 per cent lower.

Third-quarter earnings season is getting underway, with signs of overall improvement in expectations of how badly US companies have been hurt by the pandemic. Analysts expect earnings to fall 19 per cent from a year earlier, according to Refinitiv IBES data, versus a 25 per cent drop forecast on July 1.have also begun to digest the prospect of a Democratic victory, strategists and fund managers said.

While many investors view Democratic candidate Joe Biden as more likely to raise taxes, they are increasingly pointing to potential benefits of a Biden presidency, such as greater infrastructure spending and less global trade uncertainty.

UnitedHealth Group Inc dropped 2.9 per cent, despite raising its profit forecast, as the US insurer said it was difficult to predict the fallout of the pandemic on earnings.

Declining issues outnumbered advancing ones on the NYSE by a 1.51-to-1 ratio; on Nasdaq, a 1.95-to-1 ratio favored decliners.

The S&P 500 posted 23 new 52-week highs and no new lows; the Nasdaq Composite recorded 109 new highs and 14 new lows.Volume on US exchanges was 8.2 billion shares, compared with the 9.6 billion average over the last 20 trading days.

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First Published: Thu, October 15 2020. 02:04 IST
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